Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver Defying Gravity

Commodities / Gold and Silver 2010 Oct 07, 2010 - 08:51 AM GMT

By: Adrian_Ash


THE PRICE OF GOLD hit yet another new Dollar high early Thursday, touching $1364 an ounce as the US currency slumped to fresh 15-year lows against the Japanese Yen and world stock markets also fell.

The Euro and British Pound both neared 8-month highs vs. the Dollar after their central banks failed to cut rates or expand their "asset purchase" quantitative easing at today's monthly meetings.

Crude oil ticked higher to $83.65 per barrel, and silver bullion broke yet more three-decade highs at $23.50 per ounce.

"Getting to a much higher price for gold is not quite the leap of imagination that it seems, adjusting for inflation," says Harvard economist Kenneth Rogoff.

"Gravity defying!" gasps a Hong Kong dealer in a note. "All 4 [precious] metals were heading north and sellers disappeared" in Asian trade.

"The gold chart looks to be entering the foothills of the parabola," reckons the Financial Times' Global Market View blog.

But rising 8.2% against the Dollar from this time a month ago, the gold price rose faster still – month-on-month – in the spring and autumn of 1968, late 1970, summer 1971, the first-halves of both 1972 and 1973, winter '73-74, the autumns of 1974, '75 and '76, spring and autumn 1977, and then pretty much non-stop through 1978 and '79.

Gold's current bull market saw stronger price-appreciation in Feb. 2000, May 2001, Dec. 2002, the springs of 2003, '04 and '05, Dec. '05 straight through to July '06, the last quarter of 2007, early and late 2008, early in 2009, and again in Dec. last year.

"Through the end of July," says the Wall Street Journal, "[US] investors poured $22 billion into emerging markets mutual funds and a remarkable $155bn into bond funds.

"Compared to these figures, the amount invested into gold [in the United States] is chickenfeed" – estimated by journalist Brett Arends to net-out at $2.7bn for the first six months of the year.

Online searches for "Gold Price" have meantime risen sharply in the last month, according to Google Trends data, but they remain well below the global English-speaking peaks of May 2010 and Nov. 2009.

Web searches for "Buy Gold" are running at barely one-third the peak of late 2008, says Google – just after Lehman Brothers collapsed, and when gold's month-on-month appreciation hit 15.9%, almost twice its current rate of gain.

Across all those days since 1968 when gold's month-on-month appreciation matched or exceeded its current pace, the average 22-day gain in Dollars was 14.7% according to BullionVault analysis today.

"[Gold] is still very overbought and needs a correction or consolidation to get back from the overbought condition," says Phil Smith at Reuters Technical in Beijing once again today.

"I love gold [but] this market is long overdue for a near-term pullback," says wealth-manager Gluskin Sheff's chief economist David Rosenberg.

On the monetary policy front today, neither the Bank of England or European Central Bank made any change to their record-low interest rates or outstanding "asset purchase" schemes.

Confronted with the weakest Dollar/Yen exchange rate since Easter 1995 at ¥82.24 today, Tokyo's deputy finance minister Mitsuru Sakurai said this morning that the Bank of Japan alone cannot reverse the Japanese currency's rise – implying that fiscal stimulus is set to follow the central bank's return to quantitative easing and forex intervention.

Priced in Yen, gold bullion spiked on Thursday to its strongest level since late June above ¥3,600 per gram.

The gold price in Euros also rose, adding 1.5% from last week's finish but holding little changed from one, two or three months ago.

Spot gold priced in Sterling meanwhile came within £15 of its record high at £870 per ounce, recording an AM London Fix of £853.10.

By Adrian Ash

Gold price chart, no delay   |   Buy gold online at live prices

Formerly City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is the editor of Gold News and head of research at , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2010

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in